Bitcoin Weakens As US Investor Demand & Whale Activity Shift

Key Highlights:Coinbase Premium dips into negative, signaling cooling U.S. whale demand.$800M BTC whale moves funds after 2 months — signs of strategic selling.After the KYC policy, KuCoin saw a 77% plunge in BTC reserve, reducing exchange liquidity.U.S. investor demand for Bitcoin is waning, and major holders are beginning to trim their positions. This softens Bitcoin’s bullish momentum.Moreover, Coinbase Premium has flipped negative. This signaled reduced U.S. buying pressure, while whale wallet movement alongside KuCoin’s BTC outflows adds to the caution.Coinbase Premium Slides While Bitcoin Price Shows WeaknessThe price gap between Bitcoin on Coinbase and other global exchanges, such as Coinbase Premium, has dropped to $ 5.07. In recent weeks, this indicator has been steadily recovering.It climbed from lows of around -$125 in March to over $50 by mid-April. However, it has returned to negative territory, indicating a resurgence in selling among U.S.-based whales.Bitcoin Coinbase Premium Gap | Source: CryptoQuantOften, this metric reflects U.S. investor behaviour. If the premium is positive, it implies that investors in the U.S. are willing to pay more for BTC. This can help prop up bullish momentum.However, when it becomes negative, it can mean that large holders are selling, not buying. The timing is right for the current BTC price action.Bitcoin has dropped above $97,000 to nearly $94,000 in a few days. The change comes as price momentum weakens, indicating fewer buyers are entering.Concerns of Profit Taking Are Sparked by Whale ActivityThe bearish picture is also supported by on-chain activity. Arkham’s latest update reveals that a whale holding over $800 Million in Bitcoin has transferred $2.8 Million worth of BTC. The funds were moved to a new address, signaling potential strategic repositioning.It’s the first movement in two months to an address with a history of sending BTC to Binance. This is a behaviour that is commonly associated with selling.Source: XTypically, this kind of whale behaviour indicates profit taking or a change in portfolio strategy. Bitcoin has risen from under $75,000 since early April to over $94,000. Given such a rally, some long-term holders may want to cash out part of their holdings.While the move is small in dollar terms compared to the whale’s entire balance, the timing raises questions.It happens simultaneously as a drop in the Coinbase Premium and a bearish crossover in Bitcoin’s daily MACD. As seen on trading charts, this crossover sometimes indicates that a downtrend may be in the works.KuCoin Reserves Plummet as Traders ExitExchange flows offer more clues. According to CryptoQuant data, KuCoin has shed 77.6% of its BTC reserves since June 2023.On June 5, 2023, rumors of new KYC rules triggered the drop, which deepened after the official KYC announcement on June 28. The reserves fell from 18,300 BTC to just 4,100 BTC, a net loss of 14,200 BTC.Bitcoin exchange reserve – Kucoin | Source: XThis suggests that traders and large holders may have moved their Bitcoin off of KuCoin in the face of regulatory concerns. While this trend is specific to one exchange, it has implications for market liquidity. This is because fewer coins on exchanges may reduce sell pressure.Still, it may also mean less activity if traders choose to hold rather than transact. Despite KuCoin’s Bitcoin reserves dropping, Bitcoin’s market price has continued to rise.However, it could change broader market behavior if more exchanges see similar outflows or confidence falters due to enforcement risks.Technicals Turn Cautious Amid FOMC AnticipationTechnical indicators now suggest caution. BTC is consolidating between $96,000 and $92,000, according to a chart by Titan of Crypto.The price is around $94,100, at the lower end of this range. Meanwhile, the daily MACD lines have crossed down, a signal many traders interpret as bearish.Source: XThe green zone on the chart below the current price is the Fair Value Gap (FVG) zone. Should prices continue to weaken, traders may look for BTC to revisit that area at around $88,000–$90,000. The recent price action matches this as momentum has faded after a strong April rally.Traders are closely monitoring the upcoming FOMC meeting and what Jerome Powell has to say this week. Bitcoin is a risk asset, and the Federal Reserve’s decisions often affect risk assets.If the rate policy signals prolonged high levels, it may lower BTC prices. Institutional buyers could become more cautious, adding downward pressure to the market.DisclaimerThis article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.godfrey mwirigiThe post Bitcoin Weakens As US Investor Demand & Whale Activity Shift appeared first on The Market Periodical.